Preparing your first UAE Corporate Tax return can be challenging, as it requires businesses to consider various provisions of the UAE Corporate Tax Law and ensure that their financial information is appropriately adjusted for tax purposes.

UAE Corporate Tax was introduced with effect from 1 June 2023. For many businesses with a financial year ending on 31 December, the first Tax Period was 1 January 2024 to 31 December 2024, with the return due by 30 September 2025. As the Corporate Tax return filing deadline is nine months from the end of the relevant Tax Period, the applicable deadline depends on the entity's financial year-end.

While the first filing deadline has already passed for many businesses, this guide provides practical guidance for businesses approaching their first Corporate Tax return and highlights key areas that should be considered in advance.

Who Needs to File?

Businesses and other persons falling within the scope of the UAE Corporate Tax Law are required to register with the Federal Tax Authority (FTA) and comply with the applicable Corporate Tax filing requirements. This includes:

• Mainland companies;
• Free Zone entities, including Qualifying Free Zone Persons (QFZPs);
• Individuals conducting business activities in the UAE, subject to the applicable revenue threshold; and
• Other taxable persons that are not exempt from Corporate Tax.

A common misconception is that Corporate Tax registration or filing is not required where a business has not commenced operations or has not generated taxable profits. However, registration and filing obligations should be considered independently from whether Corporate Tax is ultimately payable.

Standard Corporate Tax Rate and Filing Deadline

The UAE Corporate Tax regime generally applies as follows:

• 0% on taxable income up to AED 375,000; and
• 9% on taxable income exceeding AED 375,000.

For Qualifying Free Zone Persons, a 0% rate may apply to Qualifying Income, subject to satisfying the relevant conditions. Non-qualifying income may be subject to the 9% rate.

The Corporate Tax return and payment of any Corporate Tax due are required within nine months from the end of the relevant Tax Period.

When Is Your Return Due?

The filing deadline can be determined based on the financial year-end. For example:

There are no provisional or advance Corporate Tax instalments. Any Corporate Tax liability must be paid within 9 months from the end of the relevant tax period.

What You'll Need Before You Start

Before preparing the return, businesses should ensure that the following information and documents are available:

1. FTA Corporate Tax registration – An active Corporate Tax registration is required to access the relevant filing process.
2. Finalised financial statements – Financial statements should be finalised before preparing the Corporate Tax return. Subject to applicable requirements, audited financial statements are required where the relevant revenue threshold is exceeded.
3. Supporting accounting records – Trial balances, general ledgers, invoices, contracts, trade licence details and other supporting documents should be available to substantiate the figures reported.
4. Tax elections and reliefs – Businesses should identify whether any elections or reliefs are applicable and consider their implications before filing.

Important areas may include:

• Realisation basis election for certain unrealised gains and losses;
• Transitional relief for qualifying assets acquired before the first Tax Period; and
• Small Business Relief (SBR), where the relevant conditions are satisfied. SBR is an election that may be made for each relevant Tax Period, subject to the applicable conditions.

Filing Step by Step

A practical approach to preparing the return is to:

1. Confirm the Tax Period and filing deadline.
2. Close the accounting records early.
3. Reconcile and finalise the financial statements.
4. Identify taxable and exempt income and deductible and non-deductible expenditure.
5. Review applicable elections, reliefs and transitional provisions.
6. Prepare the Corporate Tax computation.
7. Complete the return through EmaraTax.
8. Perform a detailed review before submission.
9. Submit the return and settle any Corporate Tax due.
10. Retain relevant records and working papers for the prescribed retention period.

What Happens If You File Late?

The UAE Corporate Tax penalty framework should be carefully considered where a return is not submitted by the applicable deadline. Businesses may be subject to penalties for late filing and late payment, depending on the circumstances and duration of the delay.

Accordingly, businesses should not treat the nine-month deadline as a target date for starting the compliance process. Accounting records, tax adjustments, elections and supporting documentation should be reviewed well in advance.

Conclusion

Preparing the first UAE Corporate Tax return is largely a planning and preparation exercise. Businesses need to consider the relevant provisions of the Corporate Tax Law, identify applicable elections and reliefs, and ensure that the financial information is appropriately supported.

Early preparation is particularly important because certain elections and reliefs may have specific timing requirements and may not be available retrospectively. Businesses should therefore ensure that they are registered for Corporate Tax, close their books early, review the applicable tax positions and allow sufficient time for a detailed review before submitting the return.

A proactive approach can help businesses minimise compliance risks, avoid unnecessary penalties and establish a robust process for future Corporate Tax filing cycles.